Support to Ethiopia's Climate Resilient Green Economy

What is the project about

Signing of the MoU for the CRGE Facility: UNDP Ethiopia Resident Representative Eugene Owusu and State Minister Ahmed Shide (Ministry of Finance and Economic Development)

Ethiopia seeks to attain a triple win of achieving middle income country status, carbon neutrality and climate resilient economy by year 2025. In view of formulation and implementation of the Climate Resilient Green Economy National Vision and Strategy, this programme responds to the need expressed by the different ministries and agencies of the Federal Democratic Republic of Ethiopia, namely the Ministry Of Agriculture, Ministry Of Finance and Economic Development, Ministry Of Water and Energy, Ministry Of Industry and Environmental Protection Authority.

The CRGE programme contributes to the formulation of CRGE framework, enhancing means of implementation – finance and technology, and developing institution for coordination of formulation and implementation of CRGE measures.

The national CRGE Facility employs UNDP’s Multi-Partner Trust Fund modality and UNDP is the interim Trustee. The objective of the funding Facility is to improve environmental management for a climate resilient green development by providing grants, loans or ex-post rewards for capacity building, or implementation of sectoral CRGE Investment Plans, priority initiatives, technology generation and/or transfer, or for a combination thereof.

The Facility mobilizes a range of financial sources to cover funding needs of eligible entities for CRGE activities. It is intended that after a transition phase, the Facility will be run fully independently by the government. The Environmental Council provides highest political guidance, CRGE Steering Committee and CRGE Technical Committee provide guidance on programmes and investment plans to be financed; and chair of the Facility’s steering committee chaired by MOFED overrsees financial management and channeling of grants.

Climate change generates various kinds of risks and opportunity for Ethiopia that would affect all sectors in the country. Preliminary projections suggest that climate change can have a sizeable impact that ranges in order of 7-8% of GDP loss per year, with stronger impacts in later decades and on the poor.Ethiopia’s economy has generally low carbon intensity. Ethiopia is low emission country both at the at aggregate value and per capita. However, if the growth trajectory follows the business as usual scenario, the Ethiopia’s greenhouse gas (GHG) emissions will increase from 155 Metric tons of carbon dioxide equivalent (Mt CO2e) today to almost 400 Mt CO2e in 2030 – an increase of more than 150% and roughly the amount of GHGs that South Africa emits today. Under a low carbon growth trajectory, however, Ethiopia could offset in the order of 250 Metric Tonne (Mt) of carbon dioxide equivalent per annum. At the modest carbon price, this has the potential to generate around 2.5 billion per annum, which is twice as much as the export revenue of coffee today.

The objective of the funding Facility is to improve environmental management for a climate resilient green development by providing grants, loans or ex-post rewards for capacity building, or implementation of sectoral CRGE Investment Plans, priority initiatives, technology generation and/or transfer, or for a combination thereof.

What have we accomplished so far

Following Ethiopia's bold policy to accelerate development while reducing its vulnerability to climate change, UNDP played a leading role in coordinating the preparation and launch of the CRGE Facility, the first in Africa, to support this policy/strategy. With the launch of the Facility, Ethiopia is now in a better position to initiate programmes, finance mechanism and an institutional setup to pursue a low carbon/emission climate development strategy.

Through UNDP's support in the establishment of the National Climate Resilient Green Economy Facility Ethiopia has taken the first step in climate finance readiness.

UNDP has also provided support for trainings on climate change and green economy at four sector ministries to help mainstream CRGE into the national and sector development planning, budgeting, monitoring and evaluation as well as into the development cooperation.

Substantive support was provided to some of the "fast-start" components of the CRGE Strategy, for example the energy sector where a national improved cook stoves programme is seeking improve the enabling environment in key program areas.

Ethiopia's first CRGE investment plan and developing a National Clean Cook Stoves Programme has also been reviewed. Other interventions have also led to the review of the national energy olicy; and institutional capacity building through training and supply of materials in implementing the CRGE that focuses on the renewable energy.

Who Finances it?

Financing for this project, five million USD is provided by UNDP.

Donor name

Amount contributed per year (in USD)

2010

Japan

2,467658

Delivery in previous fiscal year

Amount disbursed per year (USD)

2010

455,785.00

2011

136,339.00

2012

1,292,746.14

Project Overview

Status:

active

Project start date:

2012

Estimated end date:

December 2016

Geographic coverage:

National

Focus Area:

Climate Change, Environment and DRM

SDG

7, 13

Project officer:

Ababu.Anage@undp.org

Partners:

Ministry of Finance and Economic Development, Ministry of Agriculture (MoA), Ministry of Water and Energy (MoWE), Ministry of Industry (MoI) and Environmental Protection Authority (EPA)